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tv   Street Signs  CNBC  July 29, 2013 2:00pm-3:01pm EDT

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that much. they are kind of hugging that negative 47-point move on the dow jones industrial average. s&p is down 6. nasdaq is down 12 on the trading session. so, ty, we'll see whether or not they can pull it back into the green by the end of the day. >> i guess there's a lot of waiting for the fed which begins its meeting and we'll find out what they do, if anything, on wednesday. that does it for this edition of "power lunch." >> "street signs" begins right now. a sleepy summer week? don't you bet on it. a huge week is here as one key housing stat surprises to the upside, and we wait on the fed. let's make a deal. big mergers stealing the headlines. we'll look for clues as to who may get the next urge to merge, and one one of those deals may leave a modern day mat man like don draper into tears. stock picks for you from a five-star fund manager, and bmw rolling out an all-electric car. the i3 is here. we'll go outside and take a look at it, and we want to hear what
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you think about a car. a 90-mile range. some say it's simply not enough, but do you like the looks? let us know. hi, everybody. mandy is still on vacation so i'm going to hit the stats for you, and even though pending home sales came in better than expected the dow is down 46 points right now. there are stom some stocks higher. the fest outperformer is pfizer and among the biggest decliners including the financials like a bank of america, if you will. so really are a down market. a little bit mixed and caterpillar also doing pretty well, and as we noted it's a huge week. literally every day includes a potentially market-moving data point. more housing coming up and got the fed and ism, and we cap it all off with the monthly jobs number on friday. joining us from wells fargo, annika kahn. the single most important thing to you this week is what? >> the mother of all indicators is going to be non-farm payrolls
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on friday. clearly we are looking for an increase of 190,000 jobs. that will continue to show that the labor market is improving, especially the private sector. the government sector continues to shed jobs, but, of course, if we look at what -- where the government is shifting jobs, it is the local sector that is actually adding and federal data is continuing to take away jobs. >> tom, do you agree that jobs report, the most important thing to you, if not, what is it? >> yeah, you know, it's always easy to say jobs in the fomc. no one should ever dispute that. the one thing that has the potential to be a little more slashing this week though is actually the gdp report and the reason we say that is we're going to receive a whole ton of back revishes, incorporating a new methodology for calculating growth, and all we know is the level of gdp is going to change by $400 billion. no idea about the growth rate, so we think the fomc sort of
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comes and goes much like anika, we expect 190,000 jobs, but in terms of the things that -- in terms of the item that we're really unsure of, it's actually the gdp report. >> you're hardly bullish on the economy. the estimate for the second quarter is 1.2 boston. i mean, that's miserable. >> yeah, it's a slower pace, but if we look at the annual growth rate for 2013, that number is somewhere around 2%, and we get a pickup in the second half of the year. we're still getting a pullback from the government sector which we've already indicated we're seeing in the labor market. so the private sector continues to move forward in the form of gdp and the labor market, and that continues to still be good news. >> yeah, but, you know, isn't it really symbolic of how low our expectations have come that we can fashion 1.2, 1.5, 1.8 as good news. what happened to 3% and go? >> yeah. the 3% story is a story of
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yesteryear. if we look at how potential output us computed, we're looking at a decline in the trend of the labor force participation rate, and productivity growth is slower, so if we take those two components into consideration, we're looking at only a 2.5% for a potential output. >> tom, what's your take on the overall economy right now? i mean, if we've got 1.5%, would you be happy with that? >> well, i think it's always a question of where expectations are. you know, we've been in sort of the low growth camp for really the bulk of this recovery, and nothing has changed for us in that regard. continue to look for 2% growth for the full year. second half a little better but one thing i like to say to clients is having a discussion on whether it's a 1.8% year or 2.2% year really misses the point. the question is when do you finally get to the 3% hurdle as you highlighted? and the key there you need to see credit flow more readily to the individual. in the be aens of that
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happening, in the absence of wages really starting to accelerate from here, you won't see that happen so from our perspective you're stuck in the 2% growth trajectory. i don't know why that's such a dirty word. >> it's not creating enough jobs. >> what's enough jobs? >> brian, 200,000 jobs in an environment where that's actually knead meeting what aggregate demand, is where you want to be. if you're growing 300,000 jobs in an environment of 2% great growth then you're creating imbalances. >> i'd rather be above 300k on the non-farm payroll. >> everyone would rather be. the question is what's the criteria for getting there, and, unfortunately, we think that we're not quite there yet. >> let's bring another voice into this conversation, the great bob pisani who before becoming our ace guy from the nyse was himself a housing guru. when the number came out, you look at the number and think, hey, a 9% jump career over year. 9% jump year over year.
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the market should do well. we're not. why not? >> i think there is -- the market is looking for some indication that there's not going to be the big housing recovery that we thought. i think they are all wrong. i do not think that going from 3.5% to 2% is going to derail the recovery at these current levels. it was a decline on a month over month basis. may was just the historically great number. we were up 4.5%, 5.8% in may, and on a skwenequential basis a that was the headline, even thought the number was a relief. on a chart basis, brian, we've been going straight up for years. today, put up the chart, the best numbers we've seen in a long, long time, off the best numbers. this may number, there we go, since going back to -- you've got to go back here and do 2006 and 2007 territory so i'm overall very pleased with these numbers. i would note that we dropped a little on the housing and home building numbers here. put up the itb which is the
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number for the etf for home building stocks. that drop that this number came out, wouldn't worry about it that much. my key point. the company that made the whole comment, d.r. horton, the guys most associated with firsttime buyers. i think that you're going to find if this thing stabilizes at 4.5%, they will find plenty of ways to buy the home they want. >> a great analysis. >> and interesting, too, because when you dive into the housing numbers, you notice in the northeast it stayed flat. >> of course. >> the most expensive homes in america here, so everybody thought that a jump in rates was going to crush perhaps us more than others. in fact, it hasn't, but it still is early in the game. what's your take? >> i think if you delve into the regional numbers and the month-by-month numbers you get a little bit of a volatile story. i think it's important to raise our heads and look at what the bigger picture is. and that's that housing is continuing to improve.
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we it be continue to see improe provement in existing even though we got a pullback. new home sales increase. for existing we need to look at mix of seams and we're getting more traditional buyers into the market and less distressed sales. >> there's an entire industry, the mortgage industry that's gearing up to offer other kinds of products for people who might need them. adjustable rate mortgages, ways to buy in for 15 years on a fixed rate and then go to a -- to an adjustable rate mortgage. all sorts of alternatives and a big industry out there that's kooepg geari gearing up. >> we need negative rate amortization. tom, are you happy with the jobs
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numbers as you're seeing them? >> happy is a relative state of mind. 200,000 is where we're running right now. we have no significant qualms with the current pace of job growth because it's effectively meeting up with the current state of demand. the one thing i would say on housing is it sounds like much like, anika, sort of in agreement. don't think that higher rates in and of themselves will be the death knell, just look at mortgage purchase applications. continue to move along at the current pace, higher mortgage rates for two months now, so i think it's -- as long as bernanke can continue to sell higher rates as a positive backdrop, i think people will probably likely buy into that. >> i hope you guys are right because i've said the same thing. i can't have any more egg on my face. thank you very much. bob pisani, thank you very much. have a great day, everybody. on deck, let's make a deal retail edition. plus, amazon's amazing run. is there anything really that can stop that stock?
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and later on, bmw's big bet on electric, the new i3 is parked right outside. that's right outside our studio. that's the i3. we're going to go check it out. i've got 12 clown friends that will stuff ourselves in there. what do you think about the car? tweet me @sullycnbc. we're on fook, we're on here, whatever it takes. let us know what you think. talk to you in a minute.
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a couple of retail names to watch out in stock land. the retailer would cut positions in the stock ahead of the quarter. they think the company will meet expectations for sales and gross margin expansion. however, there is maybe some concern about the 2014 numbers. they say there's fear it could be underwhelming. >> also, francescas, they expect near term headwinds after a lackluster quarter, stagnating margins and infrastructure. both retailers both down, but by far the big retail story of the day is this. shares of sakds higher on news it's being bought by canadian retailer hudson's bay, better known at lord & taylor. it's only monday but here's a bonus cocktail party stat for you. the hudson's bay company is the oldest company in north america.
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it was founded in 1670 as a fur trader in a faraway land known as canada. that deal got us thinking about who might be next so today we'll play a little let's make a deal retail edition. joining us is ron rogers niffin and dana telsey of the telsey advisory group also specializing in retailers. what retailers do you think could, should or will get together? >> we've had a lot of combinations in retail just over the past year, year and a half. i think of last week's announcement of maiden form and hanes brands. there's also a lot of discussion out there of what happens in the luxury good space. look at lvmp and tiffany's a name being discussed. creative talent is key and that's something that lvmh has.
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>> maiden form and hanes, the mansiere. you were a member of a lot of deals from the department stores. if you were going to do one today works would you buy and sell or get together? >> right now i would -- i'd really like to see nike go out and buy under armour. they could own that space and have the high end and the mass. it would a big winner in my opinion. i'd also like to see children's place go out and by gymboree because i think that they could have gymboree on the mall and children's place off the mall in the value centers, and they could own both high and low in the children's space, so i think both of those a lot. >> dana agrees with you halfway. dana, you think nike should do a deal but not for under armour? it is for -- >> it could be a lululemon.
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we know they are in the midst of a transition, been very successful in building a cult following of terrific product that people use over and over again and lulu is something that would give them instant credibility. jeanie jackson works at nike and her strength whether it comes online, former walmart ceo, limited at gap, knows brand and athletic and has had a product at nicky. >> why not both. lulu and nike almost the same market gap. all decent runs and nike with a lot of equity. could they pick them up? >> i agree and that was on my list as well when i was looking at who might go together. yes, some combination in that space because the space is getting crowded. they need growth. you need both men's and women's so that's a good choice. >> what about the department store space in particular? when you look at this deal, and i talked to a hudson's bay executive and they talked about going to canada, et cetera, why not regional players which is how macy's became what it is,
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maybe a dillard's and a bon ton. >> you could see names like that. you have to think what's one plus one going to get you, is it going to get you for you and would a dillard's and a bon ton do that, privately held companies out there like belks, and acting smart and making surety real estate makes sense which is a big opportunity for hudson's bay and saks would be key for a regional player as well. >> dillard's if they bought bosquoff and's bon ton and they would still be a third of the size of macy's. does dillard's have the management cajones to do it? could they survive at that scale because now you're going up against macy's which is gigantic, more than 800 and the lord & taylor and saks combo. if you're dillard's, do you say
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i'm happy with the regional presence? >> i think it's hard. hard to be a big player when the next closest competitor is almost four times your size so they need to be bigger to be a bigger factor with the vendors so i think they would be well off to merge with somebody like the belks and i think a bon ton or bosquoff's, that could all make sense because somebody could take all of those, rationalize them, close the bad stores and run the business. >> dana, before -- go ahead, last word. >> over the past two years dillard's has done a great job of enhancing their brands and stores and getting brands that hadn't sold to them before, they are now selling to dillard's. >> just to wrap this up quickly. a lot of our longtime viewers know that jan and i have a bet jc penny will not have positive same-store sales. two quarters in i'm up, not rooting against jc penney, nothing on the line except a little dinner. i just don't like their strategy. i'm going to let you buy out of
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your bet for a lunch. going to throw in the towel or still committed to a dinner? >> no chance you're going to win this. >> i'm already up two quarters? >> dana, who is going to win? >> i think it's tough to have positive comps, promoting like crazy to drive traffic. >> donor when i win the bet, you're taking. sold. >> you're on. >> get that am exblack card ready, john rogers. >> daini, thank you. up next, herb greenberg talking herbalife. s as the earnings squad previews the biggest numbers and later on a five-star fund manager joins us with his three tips. here's a clue. if you drink this, watch that and you may need one of these. that's the mystery of "street signs." mystery enshrouded in a cloak of something. more after this. was definitely worth the wait.
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it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ] . welcome to the earnings report where we dissect the earnings story.
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i'm melissa lee along with my earnings squad partner herb greenberg and cnbc's josh lipton. first off to the scorecard. 53% of the s&p 500 companies have reported so far. 67% beat their eps targets, 9% met estimates. 23% have reported below forecasts. let's start off with herbalife and herb you're looking at this one for us. >> i can tell you after a very spirited discussion i had earlier today on "fast money" "halftime" about this company, if this company had come out with really spectacular numbers this, stock would be to the moon and back. that's based on just the numbers, but i come back to what i've said all along. there are changes to the business model. those guys are doing and we'll see how name packets the actual growth of the company because some people think you should start seeing some changes in the growth metrix if the company actually is tightening the reins a little bit on their distributors. >> when you look at that stock it's been such a monster, up 80% so far this year, do you agree
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with carl icahn when he suggests that's just the mother of all short squeezes? >> i have no idea why the stock is up. carl's a lot smarter and richer and i suspect if carl says there's a short squeeze? >> is the interest high, coming out? >> one big short seller, obviously we know of one with a big percent of the short position. >> but you're looking for some sort of big move potentially from this report today? >> i don't know. when stocks move up that much before something like this, if everything isn't just right, you know, it may all be baked in. who knows, on this one. you know how i feel about this. >> meantime, taking a look at texas roadhouse reporting second-quarter earnings later today. >> texas roadhouse think steaks, ribs, chops, right? sounds good. analyst, here's what they are looking for, 29 cents on revenue of $354 million. that would mean year over year growth on the top line. the street is going to focus on
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traffic growth and productivity of new units. look at that stock as having a nice run up about 40% this year. a lot of restaurant stocks, particularly in the small to mid-space have had nice runs. commodity prices not as bad as some people feared and the consumer in a relatively better spot. >> a number of analysts, this thing has gone straight up. even though the sales growth has come down. >> 43% for the year. >> for the year, and you could argue the performance and certainly sales growth has been weakening a little bit but analyst after analyst says the stock is going up and doing their opposite and cutting their ratings down to neutral. some guy initiated the other day with a hold so they really need some blowout numbers that would appear to be here. i hate the beat the street name, but that's how the world works. >> exactly. all right. let's take a look at western union as well. wall street isn't expecting too much from this one. the global money transfer company set to report earnings tomorrow morning. this is an interesting one. up about 25% so far this year. past couple of weeks gotten a
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couple of downgrades basically on valuations so there are questions here as to what the next cat lit here is, and there's a huge overhang and that is immigration reform. there's a thought that if comprehensive immigration reform is passed sometime in 2014 this will be a drug because we saw him pact in 1986 when there was amy. fewer immigrants here transferring money home. if there is legalized -- a legalization of immigrants then it's seen perhaps these immigrants will no longer use western service to transfer money home and will go to other means open to them since they are now legal u.s. citizens like banks so this is an interesting one. >> meanwhile, the numbers have been really less, and the bulls expect the numbers to improve next year, and that seems to be somewhat vacant. looks like texas roadhouse, the same chart almost. >> oh, herb. that's it for earnings squad. if you want to join the
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conversation, tweet us. back tomorrow with more updates and insights. brian, back over to you. >> josh and herb, thank you very much. up next on "street signs," a five-star fund ranger gives us his three picks, but later on beefless burritos and kentucky unfried chicken. everything is all screwed up in fast food. that story for you coming up. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next. a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers
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all right. flying solo on "street talk" so let's bang out five stock stories you need to know b.stock one, microsoft downgraded to atlantic equities from neutral to overweight and cut the price target from 33 to 35, slightly above where the stock is right now, but they say microsoft's discounting of windows converts to an earlier point price pressure because of competition. underlinks earnings per share to drop 2% year over year. ouch. stock two. spam of a different kind, the delicious kind. hormel credit suisse to outperform raising their 14-year eps estimate above consensus. they expect a significant
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rebound in turkey in pork margins. also expects to see the skippy acquisitions exceed certain targets, especially internationally. trades, by the way, at 23 times earnings. getting a little rich for the food company but something to note. stock three also related to food. whole foods market. cantor fitzgerald turning cautious but raises the price target. downgrades the stock from a hold to a buy and say, quote, it's not the time to be greedy. we're simply worried expectations and wfm are too high heading into earnings which by the way come out on wednesday. another one of the call doesn't jive with what they are saying. stock four, everybody bilg on expedia.come. la sard cutting it a neutral from a buy. that stick hit another 52 -- week low. down 23% already this month, the worst performer in the s&p 500 this month which is odd because trip adviser, a competitor to expedia in ways, is one of the
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top best five performers in the s&p this month. go figure. maybe a segment for tomorrow. your under the radar name, ticker mtd, global lab equipment and manufacturer, upgrade from buy at cantor. they know the outlook for the second half of the year and beyond. raising their target from 252 to a a share from 205 so see 30 bucks left of upside. that is et talk and that is your under-the-radar name of the game. all right. what do food, televisions and heart valves have in common? >> something, they are all picks of our next guest. sandy is joining us now and we'll have a little fun with this one because earlier we tease it had as our eat, pray, love recommendations and here's y.let's start with eat. one of your favorite stock picks right now is ingredion, not so much creature that godzilla
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would have foul. it's actually the new name of an old company. >> that's right. this is the old corn products company so hopefully a lot of people are out there on vacation and enjoying many of ingredion's products, coke, pepsi, budweiser, nestle, but just put up numbers that weren't great, guided lower for 2014 and when i look forward i see corn one of their biggest input costs that's going to be lower if we have a banner corn crop, and i think that will stabilize margins and then the world cup in brazil that's coming next year. they should help their south american sales so i like the name a lot and i think it's time for people to buy it. >> but if corn prices spike and go up, would you change your recommendation on ingredion? >> such a long-term oriented investor i would still hold it but i do believe this is more of a tailwind than head wind and everything we see about the corn futures, et cetera, look like it will be pretty good. >> a lot of that. more than a 1% stake in ingredion. >> that was the eat, pray that
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you don't need a heart value. that's what edwards life senses do, why do you like the name? >> down from 110 to 170 bud they had pretty high expectations for the sapien valve at the end of 2012 and when they didn't meet expectations it came down. trading at 30 times earnings and can buy it at a 19 multiple. probably 300,000 older americans that suffer from something called aortic stenosis callsfying or hard nifng your heart valve. don't need the heart surgery, can use a catheter that goes through the side or the rib and it's a great procedure and helping americans live longer and healthier lives. >> now to love, and a lot of people are listening on the radio. here at cnbc we love tv so we love companies like cannes that sell electronics. >> they not only do electronics but appliances and mattresses and bedding and furniture.
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one that i brought to your viewers end of march. it was around $36, and today it's 62%. up 7%. long-term investors can buy this and i like to hold stocks greater than five years but this works out well as they go to probably 300 so i think this will work well for people in they shift can be patient. >> it's a small company now and we focused on best buy so much. they have had a great year but know the long-term struggles that they have had. what is cannes doing right? >> look at best buy or sears, you walk in as a consumer and you try to get credit at sears. it's very difficult. if you cannot get a cred cardio, you're not going to make that purchase. at cannes if your credit is too low they will turn you over to a rent to own and too high they will turn you over to a ge capital or something like that. hit the sweet spot, 550 to 625,
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they will put you on their own inhouse credit program and will take that on their own books, and they do pretty well with that environment, so the bottom line is you can get credit and that's very important to their demographic. >> you know we'll wrap it up. the second guess of the show that's mentioned access to credit as a big deal. tom porcelli talked about it in the macro economic segment and you're talking about it with conn's. >> thanks a lot, brian. take care. >> over to josh lipton for a quick market flash. >> we're watching pfizer here hitting session highs. separate its commercial operation to the food segment business including a segment focused on vaccines and another one that includes cash flow and this is all about macmising the use of capital. remember, pfizer expects to report tomorrow but before the bell analysts will be looking for 55 cents on revenue of 13 billion a year over year drop of 14%. brian, back to you. >> all right, josh, good stuff.
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thanks very much. still ahead, another big merger today that maybe has don draper wannabes all over the world reaching for an extra stiff drink tonight and why some chipotle customers are asking where is the beef? but first let's get to scott wapner to find out what's coming up on "closing bell." >> coming up on "the bell" a final and most important hour of the trading day, the dow close to a mind-boggling not that far away from 20,000 but there's one economist who says the dow could sink to 5,000 before it ever sees 20 and prince al walid ringing the warning bell to saudi arabia. we'll have those details and the clock is ticking a little more than two hours from now. cbs could vanish from time warner cable sis tells. we'll have the latest on the big media game of chicken. all that and a whole lot more when you see us on "the bell" after this. "street signs" returns after this. you make a great team.
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that's why the internet needs a new kind of server. one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this going to be big. it's time to build a better enterprise. together. where is the beef, america? well, apparently it's not at some chipotle. the fast food chain adding a vegan option to its menu in the pacific northwest. the new item is organic shredded tofu. hopefully free range tofu which
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until now had only been offered in its california locations. only about 2% of americans call themselves vegans. chipotle stock put on a tear though, up 36% so far this year. meantime, this is the first look at kfc's new concept store in louisville, kentucky. it's called kfc 11, named offer colonel sanders' 11 original herbs and spices recipe, all about boneless grilled chicken, also have wraps, rice bowls, that kind of thing. no sign of the colonel either. the restaurant opening next week has hire end furnishings and even includes things like local art. kfc parent company yum brands has been pushing for healthier fare at kfc and taco bell. let us know. would you eat at a disc 11, no fried chicken, just grills and wraps and bowls and don draper's
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deal to become one of the biggest ad company. >> the second and third large ad companies are merging to create an advertising giant. assuming the deal gets regulatory approval there would be $23 billion in ad revenue would dawar wpp group and the merge will allow it to better negotiate terms and also to leverage user data to target ads in the fast growing digital ad market which is now 22% of global ad spending and projected to grow to 27% by 2017, according to e-marketer. >> putting the resources together allows us to have a different type conversation with the facebooks of the world, the googles of the world, and it allows us to stay on the cutting edge princebly for the benefit of our clients. >> ceo john renn is talking
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about making ad agencies relevant where google and facebook work directly with companies where sales force like adobe offer certain ads to certain services. in the wake of the feel we could see some client fallout. brian, we could also see more m & a activity, a company like wpp, snapping up smaller companies to stay competitive. >> nobody brings the truth better than you, thank you very much. business owners, listen up, because tomorrow night is the can't miss premiere of cnbc prime's newest show. it is called "the profit." the guy is if you have. he is smart. he is rich, has a track record, but he does not play nice.
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a heck of a show. "the profit" 10:00 eastern time right here on filene's. the governor indicted his firm but he doesn't care. what the money manager did to show he didn't give a -- and bmw makes a big bet on electric. no real engine in this car. four streets and we'll some of the responses coming up. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading.
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their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." sorry to interrupt, i just want to say, i combined home and auto with state farm, saved 760 bucks. love this guy. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] bundle home and auto and you could save 760 bucks. alright, mama, let's get going. [ yawns ] naptime is calling my name. [ male announcer ] get to a better state. state farm.
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j&j, congratulations, yet another new all-time high for j. & j. that stock up half a percent to 93.33. up 33% this year alone.
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j&j an all-time high. mandy not here and i can still bring you a ray of sunshine. it's amazon. it is up 22% this year hitting an all-time high on friday. announcing today it has plans to hire 7,000 new people in 13 states. joining us, the benchmark company's kernies who has a buy rating on amazon. a $350 dargt. worth noting, no sell side analyst is rating more bearish than a hold. daniel, what is the world is amazon doing right. can't figure it out and a lot of people are saying it's currently trading 100 times earnings. >> you're talking about a company that could do over $75 billion in revenue this year and 95 billion in revenue next year. 20% top line growth rate and we're starting to see some follow through on the margin side of this story. seen two consecutive quarters of beats on ebitda and operating margins, so though investments in digital and third party are
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starting to pay off. >> but if i do 76 billion a year in revenue and my costs are 77 billion in revenue, what's the point? >> well, the point is they are investing for the future. i mean, these guys have barely any digital ecosystem outside the united states. they have a tremendous third-party network. it's all about investing for future growth. what other company do you know that's this large and can grow that fast, and if you trip out a lot of non-cash charges they are generating profit and that that's very misunderstood? >> i agree with you on that one and here's why. the first time on television i spoke about was in 1998, or thereabouts, and the argument about had always been the same. it's a next year story. you're investing for the future. here we are 15 years out of my first and most awful tv report in the history of humankind, and we're still talking about the same stuff. >> i mean, look, it's a little bit different this time around. they have really developed the
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north american infrastructure. the gap and the physical presence and the skews they offer internationally, they are still building those out, but they have better penetration in the eu. developing in emerging economies, sounds like it's the same old story but getting to a inflection point in eps, and the investors are rewarding them for the consistent performance they've had. >> they certainly have. you have the $350 price target. what's a catalyst going to be, daniel, to get it there? don't say more buyers than sellers. >> look, we need to see some execution from them on both the top line and the bottom line. as long as paid unit volumes continue to grow, i mean, look, we're seeing tremendous investment aws. that's a huge platform for them. could be a tremendous opportunity. very high margin it's really more of the same. as long as the top line doesn't fall off, and we continue to see expanding bottom line -- which we think you should see over the next 12, 24 months -- that should really drive the stock higher and start justifying the multiple people have been paying
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all these years. >> all right, daniel, on $350 target. daniel, a pleasure. thank you for coming on the show. >> thank you very much. what does one generally do just days after the government indicts your company? you throw a party, of course, if you are steven cohen! we're going to call him the honey badger hedge fund manager, number one, he doesn't give a -- you know what, he moves about freely. >> yeah, steve cohen's party on saturday was probably not the biggest in the hamptons but becoming the loudest. it was at his beach estate on further lane in easthampton. one person familiar with the event said about a few dozen people came, and it included donors to the ovarian research fund. the fund telling us they were not associated with the event. the big problem with this party was timing. it came just two days after cohen's firm, s.a.c. capital, was charged with insider trading. pr guru bob dylanschneider telling me, what he should be doing is keeping a low profile. if he can beat the charges, he should throw a party. not before. cohen is not the only
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billionaire to face a public party backlash. facebook billionaire parker was criticized in june for his wedding in big sir that took place in a protected redwood park. and steve schwartzman's famous 60th birthday party in 2007, that attracted a lot of attention. the bash was for him and 500 of his closest friends, including a concert from rod stewart and reconstruction of his living room and it became a big lightning rod for those targeting wall street. if you're going to party, keep it quiet. >> but here's the thing. why does steven cohen need to change his life right now? he has been indicted. and i'm not -- listen, i'm just pushing back on you, whatever -- what's he going to do, go hide and cry in the closet? >> it's an interesting debate. >> the guy, we have learned, just like our friend the honey badger, he takes what he wants. >> some say it's tone deaf. other people say -- >> it's not tone deaf -- >> if he's convined -- >> i scratched my chin.
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>> -- if he's convinced of his innocence and he knows he's right, he's done nothing wrong, why should he change his life? those are two opinions out there. >> that's right. >> and we'll see -- >> we always say act -- you hear people say that about somebody, they're acting guilty. he's not acting guilty. >> he's acting like steve cohen, and a great poker player. he'll always keep the poker place. >> a thick set, broad shoulders and moves about freely. a lot in common, robert frank. thank you very much. >> you bet. up next, we'll kick the wheels on bmw's new, all-electric i3. still to let us know what you think. before we go to break, a little history lesson. on this day 104 years ago, gm bought cadillac for a cool $4.5 million -- yeah, million, 104 years ago, folks. provided power steering as well as automatic windshield wipers. if gm were to sell cadillac
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today, it would likely get about $500 million for the brand. that's just one guy -- you have to -- who can look, you know, the cadillac of the '70s, 27 feet long, could seat eight. no seatbelts, crush velvet seats, fantastic. we'll check out the bmw i3 after this. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids.
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yeah, hey, brian, thanks so much. i can tell you, i just found out that, you know, dan loeps is stepping up its criticism of sony in a new letter to investors. it's a quarterly letter to investors. i'm going through it now. i can tell you at least some of the words that are being used here, mr. loeb in this letter, again, regular quarterly letter to third point investors, says while ceo focuses on electronics, entertainment is in desperate name of proper supervision. we believe sony's board, which we understand continues to consider our suggestions, has plenty of reasons to worry about entertainment and should enact our partial listing proposal quickly. remember, dan loeb has argued that sony should spin off its entertainment unit because of the underperformance. he has amassed 6.9% stake in sony. he's sent two letters to that
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company's ceo, who has promised to consider the idea. but i think most people who have observed the issue to this point say it's unlikely that sony is going to take up mr. loeb on his suggestion. let me also mention that a new equity position is being revealed, and that's in cf industries. cf industries, a new equity position by dan loeb's third point. you can see, obviously, what the stock is doing as a result of that. quoting from the letter, we believe its structural cash-flow generation strength is misunderstood, and that management should deliver a much larger dividend to its shareholders. such a dividend would highlight the sustainability of its cash-flow generation and lead to a substantial rerating. that's probably the most important point of the letter, regarding cf industries. just to rehash the top, it's dan loeb is stopping up his criticism of sony entertainment in his efforts to try and get that company to spin off the entertainment division.
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but that is the very latest from the most recent letter to investors, a quarterly such letter from third point. guys, back to you. >> all right, scott, thank you very much. phil lebeau, the i3 bmw. you took it for a spin. your thoughts? >> interesting car. the question is, does the price point work? sorry, that's the coach door. >> they used to call it a suicide door. >> you get 80 miles, all electric. 80 to 100. >> is that enough? >> well, for 41,350, that's the question. is it enough? you can get a range extender that will double that, but it drags the price up to 45. >> it's a very good-looking. a lot of room. you're not a small guy. we got in, no problem. are electric cars, though, are they third cars for rich people? are they practical cars? >> they're becoming more practical. at the end of the day, depending on where you live -- unless you live in a city, and they are targeting people in cities around the world, because they're going to sell this worldwide, unless you're living in a city, it's a third car. >> 41, you said? >> 41,350. >> 41,350, probably tax credits.
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>> yeah, 7,500 from the feds -- >> or the federal government. thank you very much, uncle sam. so it drove fast, 0 to 60? >> 7 seconds. you know what, you won't feel like you're in a tin can. >> well, being 6'4", we'll see what we can do here. oh, not bad. phil, thank you very much. thanks for watching "street signs." "closing bell" is next. eh, eh! all right, welcome to the "closing bell," i'm scott wapner here at the new york stock exchange. >> i'm diely and maria and bill will be back tomorrow. it's the dog days of summer. we have a big day for you today on the show. the market having a quiet monday, but if one guest is right, it won't be quiet for long. terry burnham, former goldman sachs trader, says the dow is likely to fall to 5,000 than it is to hit 20,000. he's here to explain that incredible bearish call. >> we wan h


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